[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Notices]
[Pages 49829-49830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21176]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48321; File No. SR-ISE-2003-15]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change, and Amendment No. 1 Thereto, by the International Securities 
Exchange, Inc., Relating to Limitations on Liability

August 12, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 29, 2003, the International Securities Exchange, Inc. (``ISE'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the ISE. On July 30, 
2003, the ISE submitted Amendment No. 1 to the proposed rule change.\3\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule

[[Page 49830]]

change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Mike Simon, Senior Vice President and 
General Counsel, ISE, to Nancy Sanow, Assistant Director, Division 
of Market Regulation, Commission, dated July 30, 2003 (``Amendment 
No. 1''). In Amendment No. 1, the Exchange submitted a technical 
correction to the rule text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to adopt a rule disclaiming liability for 
The Options Clearing Corporation (``Clearing Corporation'') with 
respect to the Options Intermarket Linkage (``Linkage'').
    The text of the proposed rule change, as amended, is below. 
Proposed additions are in italics.
* * * * *

Rule 1905. Limitation of Liability

    The Clearing Corporation shall have no liability to Members with 
respect to the use, non-use or inability to use the Linkage, including 
without limitation the content of orders, trades, or other business 
facilitated through the Linkage, the truth or accuracy of the content 
of messages or other information transmitted through the Linkage, or 
otherwise.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the ISE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The ISE has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt a rule to limit the liability of the 
Clearing Corporation with respect to the Members' use of the Linkage. 
Pursuant to the Linkage Project and Facilities Management Agreement 
(``Agreement''),\4\ the parties to the Agreement who are Participants 
in the Intermarket Option Linkage Plan, including the ISE, are required 
to file a proposed rule change with the Commission providing the 
Clearing Corporation with limited liability with respect to Participant 
Members' use of the Linkage within four months following the Linkage's 
effective date. Hence, the ISE proposes this rule change to fulfill its 
obligation under the Agreement.
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    \4\ Linkage Project and Facilities Management Agreement (January 
30, 2003).
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2. Statutory Basis
    The ISE believes that its proposal is consistent with Section 6(b) 
of the Act \5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \6\ in particular, in that it seeks to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transaction in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The ISE does not believe that the proposed rule change, as amended, 
will impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The ISE neither solicited nor received written comments concerning 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which the ISE consents, the Commission will:
    (A) By order approve such proposed rule change, as amended; or
    (B) Institute proceedings to determine whether the proposed rule 
change, as amended, should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-0609. Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filings will also be available for inspection and copying at the 
principal office of the ISE.
    All submissions should refer to File No. SR-ISE-2003-15 and should 
be submitted by September 9, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-21176 Filed 8-18-03; 8:45 am]
BILLING CODE 8010-01-P